US stock markets experienced a downturn on Monday as rising oil prices and increased Treasury yields sparked concerns about inflation and borrowing costs. The S&P 500 fell by 0.6%, the Dow Jones Industrial Average decreased by 0.4%, and the Nasdaq Composite also dropped 0.6%. This decline followed a brief surge in Brent crude oil prices, which climbed above $100 per barrel before settling around $97.61.
Volatility in oil prices has been driven by uncertainty over tanker movements through the Strait of Hormuz amid ongoing conflict involving Iran. These higher energy prices have fueled worries about inflation, contributing to a rise in US gasoline prices over the past year.
The inflation concerns have had a ripple effect on Treasury yields, with the 10-year Treasury yield rising to 5.24% from 5.17% and the 30-year yield climbing to 5.56%. Such increases in borrowing costs can exert pressure on both businesses and consumers, while also making stocks and other investments less attractive.
Airline stocks in particular took a hit as investors weighed the impact of higher fuel costs. American Airlines and United Airlines both registered losses as a result. Additionally, stocks related to gold were weakened due to a sharp decline in gold prices during the trading session.
